WPP’s spectacular Brexit boost underpinnned by solid international performance

Addressing the nation on the wireless this morning (he doesn’t really require an interviewer) WPP CEO Sir Martin Sorrell (below) had to try to sound downbeat about the UK’s Brexit vote even as the fall in the value of the GBP (about 18 per cent currently) sent WPP’s earnings into the stratosphere; third quarter 2016 reported revenue up 23.4 per cent to £3.61bn.

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That’s pounds though. In other currencies revenue was up 4.6 per cent at $4.74bn, up 4.2 per cent at €4.25bn and down 12.3 per cent at ¥485bn. Q3 net sales were up 7.8 per cent in constant currency (not that such a thing seems to exist these days) with like-for-like net sales, WPP’s preferred measure of organic growth, up 2.8 per cent.

This measure is not strictly comparable with its rivals’ organic measures but still puts it comfortably ahead of Publcis Groupe (0.2 per cent), Omnicom (2.3 per cent) and, roughly, on a par with Interpublic and the much smaller Havas. Where WPP usually beats the field is turning such gains into profit but we won’t know that until later in the year.

Advertising and media, and branding, healthcare and specialist communications, both performed strongly; PR was OK while research, or data investment management as WPP calls it, was down a bit, as it usually is. Sorrell, though, would say this is a key servant of WPP’s “media investment management” offer – which it probably is in a programmatic media world.

On this Sorrell has some interesting observations. To wit:

“Digital revenue across the Group was up strongly, over 6% like-for-like. There does seem to be growing client concern around what one major client, in particular, calls the three “v”s, value, viewability and verification, mainly in relation to on-line video. Another major client has raised questions about the distribution of on-line spending, if not the absolute level.

“There is also client concern with the unequal measurement standards between off-line and on-line media, heightened by independent research indicating higher levels of “bots” viewing than measured by Google and a mistake in viewing time statistics by Facebook. We remain committed to the highest standards of clarity and transparency on media buying and leading the industry in developing more contemporary measurement standards in off-line and digital media, which even some of our competitors now acknowledge.

“As one of our clients has also very recently pointed out, the way to achieve this is for clients and agencies to build trust in one another and work together, not antagonise one another.” (our emphasis).

This is surely a reference to the Pandora’s Box supposedly opened by the US Association of National Advertisers’ investigation into “transparency” and the subsequent spate of media reviews, which isn’t over yet.

With $5bn or so of WPP client money heading to Google and Facebook Sorrell and his un-named client are right to be worried about flaky measurement. But clients are also concerned about the big media agencies (WPP’s are grouped under GroupM) and their programmatic trading. Programmatic is where media agencies make much of their money these days and where their biggest investments are too.

Pushing such worries aside, WPP is still motoring on and looks certain to stay ahead of its marcoms rivals in the forseeable future.

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About Stephen Foster

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Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.